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The New York Times
January 13, 2006
Maryland Sets a Health Cost for Wal-Mart
By MICHAEL BARBARO

ANNAPOLIS, Md., Jan. 12 - The Maryland legislature passed a law Thursday that would require Wal-Mart Stores to increase spending on employee health insurance, a measure that is expected to be a model for other states.

The legislature's move, which overrode a veto by Gov. Robert L. Ehrlich, was a response to growing criticism that Wal-Mart, the nation's largest private employer, has skimped on benefits and shifted health costs to state governments.

The vote came after a furious lobbying battle by Wal-Mart and by labor and liberal groups, and is likely to encourage lawmakers in dozens of other states who are considering similar legislation.

Many state legislatures have looked to Maryland as a test case, as they face fast-rising Medicaid costs, and Wal-Mart's critics say that too many of its employees have been forced to turn to Medicaid.

Under the Maryland law, employers with 10,000 or more workers in the state must spend at least 8 percent of their payrolls on health insurance, or else pay the difference into a state Medicaid fund.

A Wal-Mart spokeswoman said the company was "weighing its options," including a lawsuit to challenge the law because it is close to that 8 percent threshold already.

It is unclear how much the new law will cost Wal-Mart in Maryland - or around the country, if similar laws are adopted, because Wal-Mart has not publicly divulged what it spends on health care.

But it was concerned enough about the bill to hire four firms to lobby the legislature intensely over the last two months, and contributed at least $4,000 to the re-election campaign of Governor Ehrlich.

A spokeswoman for Wal-Mart, Mia Masten, said that "everyone should have access to affordable health insurance, but this legislation does nothing to accomplish this goal."

"This is about partisan politics," she said, "and this is poor public policy driven by special-interest groups."

There are four employers in Maryland with more than 10,000 workers - among them, Johns Hopkins University, the grocery chain Giant Food and the military contractor Northrop Grumman, but only Wal-Mart falls below the 8 percent threshold on health care spending.

A Democratic lawmaker who sponsored the legislation, State Senator Gloria G. Lawlah , maintained: "This is not a Wal-Mart bill, it's a Medicaid bill." This bill says to the conglomerates, 'Don't dump the employees that you refuse to insure into our Medicaid systems.' "

Opponents said the law would open the door for broader state regulation of health care spending by private companies and would send the message that Maryland is antibusiness.

Several lawmakers said that in the end, the law would require Wal-Mart to spend only slightly more than it does now on health insurance. But with Wal-Mart refusing to disclose what it pays for health costs, it was unclear how much more it would be required to pay.

This is the second time that the Maryland legislature, which is dominated by Democrats, has passed the Wal-Mart bill. Governor Ehrlich vetoed it late last year, inviting a senior Wal-Mart executive to sit by his side as he did so.

Indeed, the bill is shaping up as an issue in the fall campaign, with Republicans and their business allies lining up against it, and Democrats and their labor union supporters backing it. Wal-Mart has 53 stores and employs about 17,000 people in Maryland.

Debate was particularly emotional among representatives from Maryland's Eastern Shore, where Wal-Mart recently announced plans to build a distribution center that would employ up to 1,000.

Wal-Mart executives have strongly suggested that they might build the center elsewhere if lawmakers passed the health care bill.

In a passionate speech in the State Senate, J. Lowell Stoltzfus, a Republican, warned that the bill "jeopardizes good employment for my people."

"It's going to hurt us very bad," he added,

The bill's passage underscored the success of the union campaign to turn Wal-Mart into a symbol of what is wrong in the American health care system.

Wal-Mart has come under severe criticism because it insures less than half its United States work force and because its employees routinely show up, in larger numbers than employees of other retailers, on state Medicaid rolls.

In response to the complaints, the company introduced a new health care plan late last year, with premiums as low as $11 a month.

Consumer advocates specializing in health care are hoping that the Maryland law will be the first of many.

"You're going to see similar legislation being introduced," said Ronald Pollack, executive director of Families USA, a nonprofit health advocacy organization, "and debated in at least three dozen more states, and at least some of those states will end up also requiring large employers to provide health care coverage."

Mr. Pollack suggested that he did not expect any groundswell of opposition from corporate America. Most companies, he said, provide insurance and know that the costs of medical treatment for uninsured people are reflected in their insurance premiums. Mr. Pollack said that, by his organization's calculations, the cost of such treatment drove up employer premiums by $922 a family last year. In 2006, he said, the added cost could reach $1,000 a family.

"Those employers should welcome the fact that the companies that do not offer coverage now will be forced to step up to the plate," he said.

State lawmakers here in Annapolis took repeated swipes at Wal-Mart during debate over the bill on Thursday. It appeared that the company's intensive lobbying campaign in Maryland, including advertisements arguing that the requirement would hurt small businesses, might have soured some lawmakers.

Senator Lawlah called the lobbying "horrendous" and adding, "I have never seen anything like it."

Frank D. Boston III, the chief lobbyist for Wal-Mart on the health care bill, stood in the main corridor of the Capitol building on Thursday wearing a look of resignation. Referring to unions in the state, he said, "They have a power we can't match, and we worked this bill extremely hard."

Class-Action Case in Pennsylvania

By Bloomberg News

A Pennsylvania judge granted class-action status yesterday to a lawsuit contending that Wal-Mart employees had been pressed to work through breaks and after hours.

The suit could include as many as 150,000 current or former employees in Pennsylvania who have worked at a Wal-Mart store or at the company's Sam's Club warehouse chain since March 1998, Michael Donovan, the lead plaintiff's lawyer, said.

The latest class-action filing against Wal-Mart came after a California jury last month awarded workers $172.3 million in another off-the-clock case.

Wal-Mart is appealing. The company settled a similar case in Colorado for $50 million.

Wal-Mart has given "every indication" that it will go to trial rather than settle, Mr. Donovan said. A Wal-Mart spokesman, Kevin Thornton, said the company was considering appealing the decision.

Claudia H. Deutsch contributed reporting from New York for this article.

I doubt it will hold up in court. I know of NO laws requiring any company to provide Health Insurance to its employees, and this bill was clearly aimed at ONE company. Laws must apply equally to all and this one dosen't.

Health care costs are out of control and companies are losing the ability to deal with them(see General Motors). We need to start looking at deciding which way we are going to go on this issue. We need to go with either a single payer government program so that health insurance is not related to employment or a program where the individuals buy their own insurance with the help of government vouchers for those who need them so that health insurance is not related to employment.

Either way the connection between employment and health insurance has to be severed.

PBS did a program on Wal-Mart and Communist Red China...let me put it too you this way. Wal-Mart is marking things up 70 -90 percent from items from Red China and raking in the money...people are catching on to Wal-mart and how they may have one item that is a low price but that is only to hook you into the area and other items which may not be the lowest price.

Wal-Mart and Red Chinas relationship almosts borders on treason with me(imho) bottom line

This whole issue of govt. paid health care is yet another socialistic program worked on for many years. Back in the 60's we had insurance that I/my employer paid for and amounted to about $20 a month and covered everything. The liberals began demanding more rules and testing proceedures and such, that now the Dr. or I should say "health care provider" must commit to tons of paperwork, and a myriad of tests for a simple ailment because lawyers stand at the ready preying on them, and praying that the HCP messes up.

Demanding universal health care is a Socialist, or Communist program that we are being forced to take. Shame on you Constitutionists that support it.

Originally posted by carpro: They have 17,000 employees in Maryland. It wouldn't surprise me, if the law is upheld which doesn't seem likely, to see Wal-Mart close enough facilities to get under the 10,000 threshhold.

Throw 7,000 people out of work and see how the state likes it.

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So, are you saying that these people, who have virtually no access to any meaningful health services, should be farther hurt by losing their jobs? What, should they be punished for being poor? After all that seems to be their only crime.

I think that the government should see to it that all it's citizens have access to at least basic health care. Without adequate insurance, poor people don't have this at all. If you think that a poor person can go to the county hospital and receive treatment for a condition that is not life-threatening, you are wrong! Also, working people with inadequate insurance are not in much better shape. If they have a condition that is not immediately life-threatening they are ignored. Only after the condition has become terminal do they get much care at all.

I know that a person can get a bone mended, but can the get a CAT-scan or a MRI for a possible condition if they don't have the money for the treatment. If so, let me know, I could sure put this information to good use!